Lossless algorithms are methods used to compress data without losing any information. This means that when the data is decompressed, it returns to its original form exactly as it was before compression. Common examples of lossless algorithms include ZIP and PNG, which are often used for files and images, respectively. These algorithms are essential in various applications where data integrity is crucial, such as in text documents and software distribution. By reducing file sizes while preserving all original data, lossless algorithms help save storage space and improve transmission efficiency without sacrificing quality.